Replaced Floors After Water Damage - Upgraded Some Undamaged Floors

I recently had a water damage event at my rental property which damaged the flooring in majority of the rooms. Since we had to replace most of the floors, we went ahead and replaced the floors in the entire unit (even the undamaged rooms) so they would all match. Also, the flooring was previously carpet or cheap laminate; we replaced with nicer flooring. Insurance proceeds covered most of our expenses for the floor replacement, but not all (as expected, since we replaced flooring in more than just the rooms that were damaged).

Rough estimates: replacing all of the flooring cost $13,500; we received $12,000 from our insurer.

Question: how do I report this? Can I deduct the entire cost (less what we received from the insurer, so $1,500), or do I have to report  the $1,500 as an improvement and depreciate, since we improved some undamaged areas?

Thanks!